F G Wilson Case Study

F G Wilson is the largest European manufacturer of diesel generators, a wholly-owned subsidiary of the US Caterpillar group. The company manufactures a very wide range of generators in a configure- or design-to-order environment. MML provided learning and coaching support for the re-implementation of the SAP ERP package.

The project objective was to re-implement SAP to deliver dramatically improved performance for the business, in terms of rapid and reliable customer response, reduced cost, reduced lead times and increased flexibility. Our aim was to transfer the knowledge and skills to F G Wilson staff to enable them to achieve and then maintain this objective.

The initial step was to conduct an audit of the existing implementation, to identify gaps in the business processes and assess existing levels of knowledge. This exposed significant opportunities to improve the performance of the process and pinpointed the additional competencies staff needed to acquire. From our recommendations we were able to develop a fully integrated education and implementation plan. This included:

• delivering a range of tailored education courses to a cross section of the site, from board to shop floor, giving both overview and detailed “practitioner” level learning;
• working with the board to define of a high-level process design specification for the new ways for working combining Lean techniques with ERP;
• helping the senior team to define a set of performance measures that would enable them to assess the effectiveness of the process and its impact on the bottom line;
• facilitating the task teams drawing process maps of existing working practices using RADs and doing a detailed gap analysis;
• supporting the teams designing the new order fulfilment process, again using RADs to develop a detailed, integrated set of process maps, showing how and where the different techniques would be used;
• supporting the design of the process testing and cut-over planning using structured tools and techniques.

The combination of education and a structured design process enabled the project team to define radical changes to the business process quickly and with confidence. The policies and objectives defined in the high level specification enabled them to select the most appropriate tools for each task. The resulting detailed design employed a mix of ERP and Lean techniques, including:

• second level ATP, allowing delivery dates to be calculated and quoted at order receipt;
• pull systems to control the line and materials flow;
• different classes of stock controlled by MRP, back-flushed re-order point or kanban respectively;
• lineside stock for commonly used items, with others picked and kitted;
• master scheduling to smooth the total load and project material requirements;
• mixed-model sequencing to balance the line and individual workstations.

Working as part of an integrated, tripartite team that included their SAP partner, we helped them to select the specific functionality in SAP that would best support the newly designed process. Selected configuration options were evaluated individually for fit before being put through a series of formally structured off-line tests of the complete process. Particular attention was paid to testing exceptions to ensure the new process was robust.

In parallel with this we provided support to the project team to implement the supporting changes ahead of the system go-live. This included:

• conducting a detailed analysis of historical demand information, in order to select the most suitable methods for controlling different items;
• advising on changes to the layout and operation of the production assembly line;
• implementing new stock control procedures based on PI techniques, to improve the accuracy of floor stock;
• introducing problem solving techniques for issue resolution;
• re-balancing the kanban stocks and revising the control processes;
• establishing the data models and structures for an off-line S&OP evaluation model;.

Our objective, to transfer skills to the F G Wilson team, was successfully achieved. They managed a problem free cut-over unaided just seven months after the project started.

Measurable business improvements realised within the first six months included:

• reducing the build lead time from 15 days to 2 days, taking £0.75m out of WIP;
• improving inventory accuracy from 34% to 96%;
• raising customer service levels from 36% to 98%.

In addition to this, less easily quantified benefits included:

• avoiding the cost of developing a stand alone WIP tracking system — proposed when assembly lead times were three weeks;
• giving customers a reliable delivery date at order entry and not having to keep revising it, a common practice when using standard lead times;
• reduced project risk and time scale, delivering a high quality result with few post cut-over problems.

The pilot was run on one of the six production lines. Since implementation, the in-house team has successfully rolled the programme out across all the remaining production lines largely unaided. MML simply provided tailored courses covering the principles and practices being adopted, as each business unit was addressed. The highly successful business model has also been exported to other subsidiaries within the group, in Germany and South America.

More recently, the site has received its “Class A” accreditation. It is the first site in Caterpillar to achieve this and may have been the first SAP site in Europe to become accredited. The project manager commented that the work done during the re-implementation project, particularly the education, laid much of the foundation for the cultural change that enabled them reach this goal before other subsidiaries.